InvestIdeas

Some news on Boustead from Dow Jones. Will post some research here from Phillips or DBSV in a later post. Note: I am vested in Boustead

DJ MARKET TALK:Boustead Untraded In Mkt Uptick Despite S$32M Jobs

0239 GMT [Dow Jones] Boustead Singapore (B04.SG) untraded, last closed at S$1.87, as players overlook historically illiquid stock to snap up other shares while buying momentum in broad market still strong (STI +1.8%), despite news of engineering services firm's S$32 million contract wins. While latest wastewater treatment contracts from Samsung (000830.SE), Toshiba (6502.TO) expected to boost results for FY ending March 2009, investors possibly prefer to wait for stronger orderflow before revisiting stock. "Boustead is still closing deals and picking up new contracts, but order size has shrunk relative to a few months back," says DBS Vickers, which has Fully Valued call, S$1.90 target; "we see further sizable contract wins as potential catalyst to the stock." (FKH)

Hi MW,

Welcome !

The following are some notes that I have on Boustead. Not vested but it is on my watch-list.

1) Chartered was selling; Need to check SGX website for the latest info.

2) The Target Price that I have are:-
a) Kim Eng 1.42 Aug 1
b) DBS 1.9 Mar 11 from 2.74 Jan 22 Jan 3 Nov19 2007 from 1.67 May 4 Aug 3 & Oct 3
c) Phillips 2.49 Apr 10 from 2.47 Mar 27 from 2.67 Jan 28 from 2.69 Nov15 from 2.47 Jul 31 2007 from 2.11 Apr 13

3) I'm concerned about their margins ie. hike in raw material price, depreciating US$ and increased iin labor cost.

Take care,
Winston

MW : welcome

Dear all, if you are interested in Boustead, do get the latest June 2008 issue of "Pulses" magazine which features CEO FF Wong on the cover. There is a 3 full-page interview with the man on his vision for the company and how he plans to build up its earnings stream over the years.

A good and detailed read !

Note: Boustead will be releasing FY 2008 results tomorrow May 28, 2008 after market close.

Dear all, article in BT about Boustead's record profit. Have a good read !

Business Times - 29 May 2008

Boustead posts record profit

Net earnings rise 46% to $51.5m, 6th annual jump in a row

By VEN SREENIVASAN

ENGINEERING and infrastructure group Boustead Singapore has reported a sixth straight year of record profit as all its business units continued to fire.

Net profit rose 46 per cent to a record $51.5 million for the year ended March 31, 2008 - surpassing analysts' expectations - as revenue rose 28 per cent to $438.3 million. Earnings per share rose to 20.1 cents from 13.9 cents.

The strong performance has prompted the company to declare a special dividend of two cents a share on top of a final dividend of five cents. It has already paid an interim dividend of three cents a share.

The results were achieved on record performances by three of Boustead's four operating divisions.

Its energy-related business division generated a 5 per cent rise in revenue to $137.2 million. The real estate solutions business jumped 55 per cent to $193.3 million. And the geo-spatial business grew 9 per cent to $67.8 million. Even loss-making water and waste-water unit Salcon boosted revenue by 51 per cent to $35.9 million.

The group's order book came to $500 million as at March 31, when Boustead had a $151 million net cash position.

Its real estate solutions division was the star performer for FY2008, contributing revenue of $193.3 million.

Stripping out the sale of two industrial leasehold properties, comparative revenue from core design and build activities grew 59 per cent to $57.3 million.

Boustead said that the division would continue to capitalise on the strong fundamental support for industrial real estate in Singapore, while also expanding in China and Vietnam.

In Libya, the real estate solutions division had negligible revenue recognition from a new township at Al Marj for FY2008. But the project is on schedule and is expected to contribute significantly to revenue and net profit for FY2009.

Geo-spatial technology revenue grew at a steady pace, but the company expects the revenue mix of this business to change, with the emphasis shifting towards professional services, thereby reducing reliance on exclusive distribution services. Boustead said that this would improve gross margins.

Group chairman and CEO Wong Fong Fui expressed delight at the sixth straight record year. 'Over the six-year period, we attained a very respectable compounded annual growth rate of approximately 35 per cent.

'However, we are not resting on our laurels. Our very capable leaders and teams worldwide are already working towards a seventh consecutive year of record-breaking achievements.'

He said that although three of Boustead's four divisions are performing well, 'we are still greatly disappointed that we have not managed to turn around the water and waste-water engineering division'. 'We have spent a great deal of energy focusing on this division and will continue to do so until it achieves profitability. We believe our efforts will be rewarded in the not-too-distant future,' he added.

Shares of Boustead - which turns 180 this year, making it Singapore's second-oldest company after Guthrie - closed nine cents higher at $2.30 yesterday.

Not vested. From DBS:-

Boustead has also been upgraded to Hold from Fully Valued, with a new target price of S$ 2.46 (Prev S$ 1.90).

Net profit of S$25.5m (-7% y-o-y, -2% q-o-q) was above our S$19.2m forecast due to better than expected cost management.

Revenue rose 14% y-o-y and 13% q-o-q to S$232m.

Boustead has an order backlog of S$500m currently, of which the company aims to convert 60% into revenue in FY09. We have raised FY09 earnings by 20%, to account for strong order accumulation and lower costs assumption.

Dear all, I have transcribed the entire Boustead FY 2008 Results Audiocast onto my blog at http://sgmusicwhiz.blogspot.com in "question and answer" format. It will be in 2 parts since it's very long (6 pages in total to type out !). Please feel free to comment, thanks !

Dear all, Part 2 of the Boustead Audiocast has been posted on my blog at http://sgmusicwhiz.blogspot.com.

Feel free to visit and leave comments, thanks !

nice, w many thanks, MW

did u get a chance to interview Wong Fong Fui?

[was look'g thro his bio-data, airlines and foodie person]

Boustead Singapore - Engineering services firm Boustead Singapore's 91.7 percent-owned unit Boustead Projects has won a S$60 million ($43.9 million) turnkey contract to build Phase 1 of the Singapore FreePort, a high-security facility for the Singapore FreePort Real Estate